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If a State goes bankrupt it will mean more than pensions are cut. Also creditors have a say in what gets paid and what assets get sold. States cannot just go bankrupt and only cut pensions. Bond holders take a hit which will negatively impact that State forever. Assets get sold- Detroit almost lost their art collection valued at $500 million.
If a State goes bankrupt what gets paid? Is it only the constitutionally required or more? Does Medicaid have priority over pensions and debt payments?
For those that think State bankruptcy will bring them glee because public pensions might take a haircut me thinks you need to rethink the matter.
Did you bother to read my post? States cannot go bankrupt. Only cities and counties can, among government entities.
Hard to feel sorry for unionized workers. Tons of nonunionized workers in the private sector lost their pensions back in the 80's. I know mine disappeared. Plus, my pension fund cut benefits a couple years ago. Nothing new. Why do unionized workers think they are exempt, especially when they are part of the cause of the lousy economy.
I am extremely sorry you lost your pension; however, the purpose of unionizing is to get bargaining strength in numbers, just as coop purchasing is buying in large numbers for a competitive edge.
Instead of your lack of empathy for union workers, why not place blame where it belongs: at the top.
When your pension was cut, what happened to the executive managers? Are they still living high on the hog?
Did they get bonuses for gutting your pension? Did they get golden handshakes and early retirement? Are they now taking world cruises with the money that could have paid for pensions instead?
Instead of your lack of empathy for union workers, why not place blame where it belongs: at the top.
The blame also lies with the voters who elected them.
The problem with many union pension funds is that the boards are elected by the unions and too often the boards have zero experience with managing funds.
Even if (and that's a big if) there's no board corruption, there's too often incompetence.
The pension fund guaranteed those accounts an interest rate return of eight-to-10 percent, no matter how well the overall fund did -- and therein lies the fiscal crisis.
Blame is only part, and quite frankly, the lesser part of the matter. The matter at hand involves people's lives - specifically their ability to afford to live in retirement. Blame and punishment of those to blame fulfills society's need to inflict harm on wrong-doers and to disincentive wrong-doing in general, but does nothing to make up for the wrong-doing and does nothing to reduce the probability of recurrence.
Right now, states can't go bankrupt. That is very likely to change.
There are a dozen states that project to have enormous problems 20 years from now.
I would say that is very unlikely to change, but predicting the future in the political/legislative arena is uncertain at best. Just because some states are going to have enormous problems in the future does not mean there will be a revolutionary change in the legal status of the fifty states. I think it is more likely that they will have to muddle through their difficulties, although it won't be pretty. There will be disruptions, vendors and perhaps even employees will wait to be paid and various emergency measures will be put into effect.
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